Cycles

1. February 2012 Cycles & Trends An Overview to Energy Sector in Mexico 2011-2012

2. Index Chapter II Energy Sector • Oil & natural gas reserves • Production • Exports • Scenarios • Investments • Pemex strategies

3. Chapter II Energy Sector

4. Reserves at January 1st , 2011 (Billion boe) 50 14.3 43.1 45 40 35 28.8 15 30 25 20 13.8 15 10 5 0 Proven Probable 2P Possible 3P Oil & Natural Gas Reserves At January 1st, 2011, hydrocarbon proven reserves are 13,796 billion barrels of crude oil, 74% corresponds to crude oil; 9% to condensates and plant liquids, and the rest, 17% , to dry gas.

5. Oil & Natural Gas Reserves R Reserves Evolution Hydrocarbon reserves evolution (Billion barrels) 70 58.2 56.2 Possible Probable Proven 60 53.0 50.0 48.0 46.9 46.4 50 45.4 44.5 43.6 43.1 43.1 25.1 23.5 21.9 20.1 40 18.9 16.5 17.6 15.5 14.7 14.3 13.8 14 30 21.2 15.3 15.1 15.8 21.3 14.5 14.2 15 17 15.8 16 20.8 20 10 14.8 14.7 14.6 14.6 14.3 14.2 13.4 13.1 13 12 11.3 10.3 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

6. Evolution of crude oil reserves (Billions of barrels) Possible Probable Proven 35 30.9 30.5 30.6 30 10.4 10.2 10.4 25 20 10.4 10 10.7 15 10 10.1 10.1 5 9.7 0 2009 2010 2011 Oil & Natural Gas Reserves From 2010 to 2011, crude oil reserves 3P increased by 62 MMboe, mainly due incorporation of 878 MMboe exploratory crude oil. Proven reserves decreased by 259 MMboe as result of production of 940 MMboe in 2010.

7. Natural Gas Reserves Evolution (Billion cubic feet) Possible Probable Proven 70 60.4 61.2 61.3 60 16.8 17.3 17.6 50 40 20.7 20.9 20.1 30 20 23.7 23 22.6 10 0 2009 2010 2011 Oil & Natural gas reserves From 2010 to 2011 3P reserves of natural gas increased in 39 Billion cubic feet, due mainly discoveries of 2,724 billion cubic feet of gas. In this way, it was possible to offset a significant production volume of 2,562 billion cubic feet that were extracted during 2010.

8. Evolution of hydrocarbon discoveries (MMboe) 2000 1,773.9 1800 Possible Probable Proven 1600 388.9 1,482.1 1,437.8 1400 230.8 363.8 1200 1,053.2 490.3 966.1 312.1 1000 182.8 182.9 548.6 800 229.1 492.6 600 894.8 894.8 400 569.7 554.1 200 377.8 0 2007 2008 2009 2010 2011 Oil & Natural Gas Reserves Between 2007-2010 exploratory activities have allowed incorporate sustained volumes annually of reserves up to 1,000 MMboe, this situation has made possible fulfill commitments of incorporate reserves by exploration .

9. Evolution of recovery rate of proven reserves (%) 100 90 80 70 60 50 40 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 25.5 22.7 26.4 41 50.3 71.8 77.1 85.8 100 % Oil & Natural Gas Reserves Recovery rate of proven reserves will reach a value of 100% in 2012, due reclassification of probable reserves to proven reserves, these will come from the development of projects such as Ku-Maloob Zaap, Crudo Ligero Marino, Bellota-Chinchorro and Chicontepec, among others.

10. Production In Mexico, oil production has decreased since 2005. Main reason is declining of Cantarell Asset. This field had its maximum production in 2004 and then began a descendant trend in a constant way. Crude Oil Production in Mexico, 1900-2025 (Thousands of barrels per year)

11. Crude Oil Production by type 2002-2011 (Thousand barrels per day) Heavy Light Ultra light 4,000.0 3,370 3,382 3,333 3,255 3,500.0 3,177 3,075 2,791 3,000.0 2,601 2,576 2,550 2,500.0 2,000.0 1,500.0 1,000.0 500.0 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 156.9 134.8 135.3 144.1 180.4 198.6 210.4 269.7 320.0 336.0 Ultra light 846.6 810.7 789.6 802.3 831.5 837.7 815.5 811.8 834.4 794.0 Light 2,173.7 2,425.4 2,458.0 2,387.0 2,243.8 2,039.4 1,765.6 1,529.0 1,422.0 1,419.0 Heavy Production In 2011 Pemex achieved to consolidate stability in crude oil production. Pemex modified descendant trend during period 2007-2009, when registered an accumulative total declining of 475,000 barrels daily.

12. Oil Production of the three main Assets (MMboe) 2,500.0 2,000.0 1,500.0 Cantarell 1,000.0 500.0 Ku-Maloob-Zaap Litoral Tabasco 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Production Reversing decline in oil production in recent years was possible primarily by increasing production in Ku-Maloob Zaap, Litoral Tabasco, Crudo Ligero Marino and Ixtal-Manik projects. They have partially compensated decline in Cantarell.

13. Natural Gas Production by type, 2002-2011 (MMcfd) 8,000.0 7,000.0 6,000.0 5,000.0 Gas non 4,000.0 associated 3,000.0 Gas associated (include nitrogen) 2,000.0 1,000.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1,271.7 1,305.4 1,379.2 1,563.3 1,863.9 2,266.1 2,613.0 2,598.8 2,550.3 2,477.5 2,205.0 Gas non associated 3,239.0 3,118.1 3,119.2 3,009.6 2,954.1 3,090.0 3,445.4 4,319.8 4,480.3 4,542.5 4,390.0 Gas associated Production Last year Pemex Exploration & Production showed a contraction in extraction of natural gas associated and non-associated, due the declining production in the main regions: Marine, South and North.

14. Exports volume crude oil (Thousand barrels daily) Istmo 2,000.0 1,843 1,870 1,817 Olmeca 1,705 1,792 1,755 1,800.0 1,686 Maya 1,755 1,600.0 1,361 1,338 1,403 1,400.0 1,222 1,200.0 1,000.0 800.0 600.0 400.0 200.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Exports On 2011, Pemex achieved a stable crude oil export platform. Lower international sales during 2008 and 2009 are explained by the global economic slowdown that led to a reduced demand of energy.

15. Value of Crude Oil Exports (Million dollars) 49,322.0 50,000.0 43,341.5 45,000.0 37,937.5 40,000.0 35,985.0 34,706.8 35,000.0 28,329.4 30,000.0 25,605.4 25,000.0 21,257.9 20,000.0 16,676.3 14,552.9 13,392.2 11,927.7 15,000.0 10,000.0 5,000.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Exports Pemex achieved a significant increase of 37.4% in revenues from foreign sales of crude oil during last year, this due the high price (101 dollars per barrel) registered by Mexican oil in the international market.

16. Pemex Annual Trade Balance (million dollars) 60,000 Exports 50,000 Imports Balance 40,000 30,000 20,000 10,000 0 2006 2007 2008 2009 2010 2011 Exports Pemex registered a surplus of 24,996 million dollars (MMUSD) in its trade balance of crude oil, petroleum products, petrochemicals and natural gas on 2011. This represent an increase of 28% compared with previous year.

17. Pemex Strategyfor 2012 (Main goals) 6,165.7 MMpcd 2,559.9 Mbd 1,331.3 Mbd 1,175.7 Mbd 1071.4 MMpcd 445.1 Mbd Natural Gas Dry gas Crude Oil Domestic International Petroleum Products imports production imports Market Market production Scenario 2012 This year Pemex will continue with its optimization program in all its processes and associated services in order to strengthen areas that create value to the company, identifying those areas that require new strategies to perform efficiently its activities.

18. Scenario 2012 Major resources for investment expenditure segment allow fulfill with maintenance and infrastructure development programs, in order to continue with modernization of the company, while reduction in current expenditure indicates a minor bureaucracy in Pemex operation. Pemex Budget by Economic Classification, 2012 (pesos & percentage structure) 141,230,386,919, 32% Current Expenditure Investment Expenditure 301,255,000,000, 68%

19. Current Expenditure Budget, 2012 70,000,000,000 (Pesos) 60,059,251,227 60,000,000,000 50,000,000,000 40,213,237,592 40,000,000,000 32,856,898,871 30,000,000,000 20,000,000,000 10,000,000,000 7,328,309,969 772,689,260 0 Public Goods Public Services Budget support Support public function Pensions & & improving efficiency & management retirements improvement Scenario 2012 Current Expenditure Budget

20. Pemex Investment Expenditure Budget, 2012 (Pesos) 301,255,000,000 350,000,000,000 274,132,762,537 300,000,000,000 250,000,000,000 200,000,000,000 150,000,000,000 100,000,000,000 17,407,323,789 3,658,787,248 3,193,598,577 1,846,916,460 785,996,808 213,527,446 50,000,000,000 16,087,135 Breakdown 0 Other Estate studies Acquisition Social Programs Investment Infrastructure Expenditure investments economic Hydrocarbons Other projects Pre-investment maintenance infrastructure Infrastructure Scenario 2012 Investment Expenditure Budget

21. Scenario 2012 Total annual expenditure programmed for Pemex in 2012 amounts to 442,485.4 million pesos, while non-programmed is 34,839.6 million pesos. Pemex Exploration & Production receives 291,075.5 million pesos from programmed expenditure and 34,475.5 million pesos from non-programmed. PEP becomes subsidiary that receives more resources.. Total programmed expenditure, investment expenditure by subsidiary (Million pesos & percentage)

22. Scenario 2012 Strategic Objectives • Based on Business Plan 2012-2016, Pemex Exploration & Production update its strategic objectives for this period as follows: • Maintain an average of oil production between 2.6 to 2.9 MMbd • Maintain an average of gas production between 5.8 to 6.1 MMMcfd • Replace 100% of proven reserves • Maintain production costs in the first quartile and optimize discovery and development costs in order to reach first quartile • Achieve the goal of zero accidents • To be considered as a socially responsible company

23. PEP, Investment Programs and Projects, 2011-2012 60 (Thousand Million pesos) 52.8 49.5 50 45.8 43.4 39.3 2011 40 2012 30.7 30 20.6 20.7 18.3 18.1 20 13.5 12.7 10 6.5 5.6 0 Cantarell Gas Ku-Maloob- ATG Burgos Antonio J. Jujo- Strategic Zaap Bermúdez Tecominoacán Program Complex Scenario 2012 Investment Programs & Projects

24. PEP, Investment Programs & Projects, 2011-2012 (Thousand million pesos) 8.0 7 7.0 6.6 6.1 6.1 5.8 6.0 2010 5.4 4.8 4.9 2011 5.0 4.5 4.2 4.0 3.2 3.0 2.9 2.8 2.8 3.0 2.5 2.0 1.0 0.0 Chuc Delta del Yaxche Caan Bellota- Poza Rica Arenque El Golpe- Grijalva Chinchorro Puerto Ceiba Scenario 2012 Investment Programs & Projects

25. PEP, Investment Program & Projects, 2011-2012 4.0 (Thousand million pesos) 3.4 3.5 3.3 3.0 2011 2.4 2.5 2.3 2012 2.1 1.9 2.0 1.6 1.4 1.5 1.2 1.0 1.1 1.0 0.8 0.7 0.6 0.6 0.5 0.5 0.0 Ek-Balam Tamaulipas- Cactus Sitio- Och-Uech-Kax Ayin-Alux Carmito-Artesa Cárdenas Lakach Constituciones Grande Scenario 2012 Investment Programs & Projects

26. Pemex Investments 350,000 350,000 (Billion pesos) 286,338 300,000 268,599 251,882 250,000 198,247 200,000 164,629 143,600 150,000 122,161 116,757 94,123 100,000 67,657 67,471 65,525 50,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Investments During current administration, investment budget has increased 100%. In 2011, Cantarell projects, Gas strategic program, Ku-Maloob-Zaap, Aceite Terciario del Golfo, Burgos and Antonio J. Bermúdez exert most of total investment.

27. Exploration & Production Esteemed Investments 30 (Billion dollars) 25 20 15 10 5 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 3 3 3 4 4 5 5 5 5 5 6 6 6 6 6 Exploration 17 18 19 18 19 18 18 18 17 18 17 17 17 17 18 Production Investments Long-term investments of Pemex Exploration & Production are focus on maintain crude oil production above 2.5 MMbd, gas extraction above 6,100 MMcfd, and reserve replacement rate exceeding 100%.

28. Crude Oil Production, 2012-2016 (Thousand barrels per day) 2,821 2,850 2,800 2,731 2,750 2,675 2,700 2,628 2,650 2,606 2,600 2,550 2,500 2,450 2012 2013 2014 2015 2016 Investments On Business Plan 2012-2016, Pemex forecast a growth rate of 2% regarding crude oil production during period 2012-2016, projection includes implementation of integral contracts for exploration & production.

29. Crude Oil Exports, 2012-2016 (Thousand barrels daily) 1,314 1,320 1,300 1,271 1,280 1,260 1,252 1,260 1,240 1,221 1,220 1,200 1,180 1,160 2012 2013 2014 2015 2016 Scenario 2011-2016 For period 2012-2016, oil exports will maintain stability, growth rate for reference period is of 1%, coupled with high prices projected, will maintain high income rates in the country.

30. Mexico: liquid hydrocarbons production scenarios (million barrels daily) 4.5 Esteemed Historic 3.6 2.7 Reference High oil prices Low oil prices 1.8 High economic growth Low economic growth 0.9 2006 2007 2008 2009 2010 2011 2015 2020 2025 2030 2035 3.7 3.5 3.2 3.0 2.9 2.8 2.3 1.8 1.4 1.5 1.7 Reference 3.7 3.5 3.2 3.0 2.9 2.8 2.3 1.7 1.4 1.6 1.8 High oil prices 3.7 3.5 3.2 3.0 2.9 2.8 2.4 1.8 1.5 1.6 1.7 Low oil prices 3.7 3.5 3.2 3.0 2.9 2.8 2.4 1.8 1.4 1.5 1.7 High economic growth 3.7 3.5 3.2 3.0 2.9 2.8 2.3 1.8 1.5 1.6 1.8 Low economic growth Scenario 2012-2035 The Energy Information Administration (EIA) reviewed oil production projections in Mexico according different scenarios; in referent scenario for 2011 forecast a decline annual rate of -2.4% for period 2008-2035, projection for 2010 rate was of -2.9% between 2007-2035.

31. Strategies Pemex has outlined the following objectives & strategies Main initiatives by subsidiaries • Increase incorporation of reserves • •Maintain production platform (Cantarell) • •Development of complex fields in an efficient way (ATG,AP) • •Reactivate marginal fields – Incentivated Contracts • •Increase and maintain use of gas Exploration & Production Refining • Increase reliability and profitability of the National Refining System • •Deep conversion projects • •Meet gas & diesel standards • •Increase import capacity and strengthen storage & distribution capacities Gas & PQB Increase process and transport capacity, according with growth in primary production and demand Petrochemical • Increase efficiency of profitable chains • •Stimulate participation of private sector in new projects development

32. Strategies Cross-cutting initiatives • Consolidation and continuous improvement of SSPA • Sustainability and Environment Protection Security emex • Operational Reliability • Control of fuels illicit market P Reliability de • Best practices in Projects development • Integral Business Model of supplies • Human Resources Strategy ol r Profitability t n and efficiency o c jo a • Strategic Technological Program • Suppliers Development • Management Processes System B Sustainability

33. Main initiatives S e curity R e s e rv es • Oil production Reserves Crudeoil production • Gas Production • Environmental r Gas production Operative Protection reliability C hicont e p e c • Human Deep waters • Lo g is t i c Use of gas resources M inat ilá n N ew • Refin ery New Tula Refinery . Fuels quality M i natit l án • Deep waters S a l amanca • Structural issues Fuels quality • Chi c ont e p ec Petroleum logistic • A l liances A l liances • Human resources • Energy Operative reliability • S a l a m a n c a Illicit market • Corporate Governance Environmental Protection • Energy reform • Corporate governance • Structuralissues: • – Fiscal regime – Labor liabilities a – Subsidies – Citizen bonds emission Strategies Prioritized initiatives: importance vs. progress High Importance Illicit market reform 2008 Medium - + A dvance Debt structure diversification –

34. Develop complex fields and reactivate marginal fields In short-term, Pemex must use different schemes in order to develop internal capacities in substantive areas n (IC) New schemes proposed are: Integral contracts Integral field laboratories n ( IL) Transactional contracts Low Medium High IC IC IL High IC IL TC IC IC IL Medium TC IL TC Complexity IC Low IL TC TC TC Deep waters C h icon t e p ec Mature s fields ( R e a ctivation) Strategies (TC ) Internal capacity Internal capacity : Human resources • T echnology • P r ocess • C omplexity: Scale • Technological challenges • Market service •

35. Original volume R e s er v es 3P Current production (MM b o e) ( bd ) (MM b o e) 1 , 46 5 104 51 46 1 4 0 32 1 Ma g a l la n es S a n t u ar i o Carr i z o Ma g a l la n es S a n t u ar i o Carr i z o Rates U S$ / b ) Sa n t u a ri o M a g a ll a n e s C a rriz o M aximum 7.97 9.78 12.31 Winning bid 5.01 5.01 9.40 20 1 1 2012 I II III IV I II III IV Mature Fields North Region . C hicontepec Deep Waters Strategies Reactivate marginal fields: Incentivated Contracts 6 fields grouped in 3 blocks Reserves 3P of 195 MMboe; Average surface: 312 km2. First round (2011): Mature Fields in the South Region Award: August18, 2011 Next Bid Calls (2012)

36. This report was prepared by: • Sergio Rivas F. • Office: +52 55 10 56 08 05 • Mobile: +52 1 55 18 00 14 16 • Mobile: +52 1 55 59 09 68 15 • Please feel welcome to contact Sergio Rivas F. • (E-mail: sergio@primerenfoque.com.mx) for any questions concerning this report.